Elizabeth Warren: Consumer Champion?

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Consumers across the country may soon have a new figurehead - and protector.

Rumors are swirling this week that Elizabeth Warren, a Harvard Law professor and government appointed banking industry watchdog, will be appointed by President Obama to serve as the head of the new consumer protection agency, which was created as part of the financial reform package passed earlier this year.

Bloomberg reports that Obama may nominate Warren to serve as the interim head of the agency sometime this week in order to bypass what some have speculated would be a risky Senate nomination process. If Obama followed this path, he would be free to let her stay on even after the interim period ended.

While the Obama administration is deliberately staying quiet on plans, there have been other telltale signs that Warren would get the nomination. She was among the three names placed on the shortlist to lead the position back in July, the other two being Michael Barr, an assistant Treasury secretary, and Eugene Kimmelman, a deputy attorney general in the U.S. Justice Department. Yet, neither of these other candidates had Warren's star power, which has only increased since the initial announcement as she has been the subject of countless blogs and opinion pieces pressuring the administration and legislators to approve her nomination.

More recently, Warren met personally with Obama at the White House and even decided to forfeit a class she was supposed to teach this semester at Harvard.

All of this leads to the conclusion that Warren is likely to get the nomination, but for many Americans, it raises an even more important question: Who exactly is Elizabeth Warren? And is she the right person to head this new agency?

Who Is Elizabeth Warren?

Warren grew up in Oklahoma in a middle-class family that was always short on cash. Early on, she developed an interest in the legal system, and particularly in bankruptcy law.

Since 1995, Warren has served as the Leo Gottlieb Professor of Law at Harvard University, where she teaches courses on bankruptcy and contract law. She’s also written several books over the years focusing on how debt, predatory lending and bankruptcy affect average middle-class Americans.

While the economy began to enter into a recession in 2007 and 2008, Warren was busy appearing on news shows and lecturing around the country about the dangers facing middle-class Americans. According to the Washington Post, her strong voice and ability to communicate attracted the attention of prominent politicians including Senate Majority Leader Harry Reid (D-Nev.), who ended up choosing her to lead the Troubled Asset Relief Program oversight committee, a position she was appointed to in late 2008.

In this position, Warren’s goal was straightforward but impossibly difficult. She was tasked with tracking the $700 billion in taxpayer money intended to help bail out the major banking institutions, all while making sure that it was used in the best way for the American taxpayers.

Warren confessed that her power to create change in this role was relatively limited, noting in one interview that, “ultimately, I don’t have a badge, don’t have a gun.” Yet, the authority alone provided her with a prominent platform to express taxpayer concerns, push for more fiscal transparency and criticize big banks and businesses for trying to derail financial reform and offering massive executive bonuses.

Why Warren Is the Best Choice

Some have argued Warren lacks significant experience working in Washington and leading a massive government agency, or that she is too obviously biased against big businesses and banks. But others might point to these same critiques and cite them as strengths.

Ultimately, there seem to be three major reasons why Warren is the best candidate to lead the new consumer protection agency.

1. The Banks Hate Her

During the past few months, bankers have lobbied hard to derail Warren’s nomination. And in a sense, this should be taken as the real proof that Warren is the right choice for the role, because the overall goal of the protection agency is to defend and represent Americans against the dubious practices of banks and big businesses. So naturally, you’d prefer someone who gets under the skin of big businesses rather than someone who gets in their pocket.

2. Obama Loves Her

The president has expressed publicly that he is fond of Warren and considers her a “dear friend.” And he isn’t the only one. Warren has earned praise from many publications and legislators. Aside from being a nice ego boost for her, this does have practical implications. Consumers need a leader who is not only able to communicate well with the public but also one who has a voice heard by the media and the legislators in power.

3. Because She Knows the Institution Better Than Anyone Else

Finally, and perhaps most importantly, the agency itself was largely her idea, and it was one that proved so inspiring that the president and members of Congress fought for it and made it a reality. Now, Warren may have the opportunity to see it through all the way.

—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.

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